How do subjective mortality beliefs affect the value of social security and the optimal claiming ages?
Tiantian Dai,
Wei Sun,
Anthony Webb
Abstract:Households that postpone claiming Social Security benefits are, in effect, making additional purchases of the Social Security annuity and acquiring valuable longevity insurance. This paper investigates the impact of plausible variations of subjective mortality beliefs on the value of delayed claiming and the optimal claiming ages of retired workers. Using the Health and Retirement Study data, we show that older individuals could, on average, predict their life expectancy correctly; however, the average varianc… Show more
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